A Cautionary Tale

Don't worry. It won't ever get this bad. Or will it?


The first panicked rumors following Ken Thompson's ouster in early June had JPMorgan considering a purchase of newly leaderless Wachovia. It seemed unlikely, considering the powerful Wall Street Bank was still haggling over the details of its March 16 acquisition of fallen rival Bear Stearns at the bargain-basement rate of $10 a share. (Bear Stearns had plummeted from an October high of $131.58 a share.) But still, if Wachovia can't stop the bleeding, consider this a cautionary tale:

Like a good number of his co-workers at Bear Stearns, "Warren Garrett" is just waiting around when contacted at his desk one afternoon in mid-May. He'd be out of a job within a couple of weeks thanks to the planned takeover, and he actually already had a good one lined up.

He looks around the trading floor to report on the state of disarray:

"Let's see. Yeah, all the [volume] traders are gone. I mean, people are just very apathetic right now. You see a lot of one-on-one side conversations going on, like just off the floor.

"Bear Stearns has always been full business attire, and that got thrown out the window pretty shortly after March 17. I would say it depends on your head trader. If the head of your desk is still wearing a suit and tie, then you do, but if he's not … you know, I saw a guy yesterday wearing a golf shirt and jeans. I see one of the middle office guys from the vol desk is wearing a Cubs hat right now.

"It's not that people are flaunting the rules. It's just that, well, everyone's just so upset with the situation. It's like their own little rebellious ways of dealing with it.  

"I mean, right now, traders would be talking to their middle office guys. They'd be caring what their P&L [profit and loss statement] was for the day and making sure … everything was booked perfectly. And now that the market's over, they'd start closing up the day's books and stuff, but they'd also be doing their research to get ready for the next day.

"Oh yeah, [people used to be here until] about 5:30 p.m. You started seeing people clear out, and then even then there was still a handful of people here at 7 p.m. or 7:30 p.m. Now, when you get here in the morning—I used to get in at 7:30 a.m., and I would be on a trading floor of 200 people. I would be like the twentieth person here at like 7:30 in the morning. Now if I get in at 7:30, I'm like the second person here. Now, [people get here at] 8:30 a.m., 8:45 a.m. It used to fill up around 8 a.m.

"As I said, either they've been told, ‘Hey, you only have a job through a certain date—at which point they're just like, ‘Well, eff this, I'm going to come in to get my paycheck, but I'm not going to put in any effort'—or they've been told they do have a job, but they don't know when they're actually going to be integrated with JPMorgan. ‘So great, I have a job, but I still lost all this stuff [as in, all my savings in company stock]'…"